Executive Forum 2002
Managing Competitive Advantage:
The Values of National Strategy

SESSION 5 SUMMARY

Friday, 27 September 2002

Session 5: Confirming Value: Export Strategy Performance Measurement

Session manager Philip Williams, Senior Adviser on Institutional Aspects of Trade Promotion, asked participants whether they carried out performance measurement related to export strategy. Ecuador reported it tries to measure service given to people who seek information from CORPEI, its export and investment promotion agency." Sometimes we try to make a cost-benefit analysis of participation in trade fairs," the CORPEI representative reported. China said it frequently carries out measurements, but the representative of a Mexican trade organization said often the measurements carried out in his country did not provide figures. "And often we don't do a follow-up." 

Williams suggested that apart from these few positive applications of measurement tools, in many countries and institutions, performance measurement is not being done or effectively. He sees four reasons:

1. fear of performance measurement because you are likely to be blamed for any poor findings.
2. the measure may cover only short term factors while the impact is long term
3. officials may be biased against trade promotion.
4. lack of knowledge of suitable measures. 

Hong Kong Trade Development Council, the Finnish trade support organization FINPRO and Malta's External Trade Organization (METCO) presented reports on their peformance assessment tools (see website). Table discussions focused on the objectives, tools and measurers recommended for performance analysis. 

On objectives, one group said they found it impossible to decide whether the aim of support should be to diversify or specialize. "One size does not fit all." Another group likewise said they had more questions than answers. A third group of developing countries suggested that export performance was too difficult to measure because the contribution of the TPO was impossible to decide. 

On assessment tools, one group named client feedback and response along with expansion of client base over time. But this would only work if the Trade Support Institution charges a fee for service. Otherwise these would not be accurate measures. Another suggested measuring success by including the reaction of foreign buyers to a country's products. More than one group suggested that donor satisfaction should also be important to TPOs since they might depend on the donor for financing. Yet another recommended interviews and follow-up as tools but said many TPOs were poor in carrying these out. A number objected to trying to pick best tools. "It could be misleading. Trade changes so much. When September 11 came, the whole dynamic changed," said one strategy-maker. "It depends on the level of development not only of the country but of your exports," said another. "You might be seeking to increase exports from SMEs or going for more value-added." 

Who should carry out the assessment? One group said the measurers should be internal to the TSI but insisted there should also be independent, third-party assessment. 

But one group commented, that for some developing countries: "Maybe learning should be more important than having measurement." 

Stephen Sultana, Malta External Trade Corporation (METCO), cautioned against relying simply on customer satisfaction in measuring performance. "If you are seeking more money from the government, it is not enough to tell the minister that you have 80% customer satisfaction (METCO's rating). We were able to get almost a doubling of our budget a few years ago by showing the minister that in two markets we had been able to increase exports by a significant percentage by promotion over the previous two years." 

Williams summed up: "I think we are agreed that performance measurement is essential. There are an increasing number of tools that can be used individually and in combination, but no single tool meets all requirements. It is also obvious that we need some clear objectives. Effective performance measurement starts with clear objectives. We must decide for whom we are doing the assessment: there are a wide range of clients. The final conclusion is that tools must change over time, because the environment is constantly changing and you will have constantly changing needs.